T/A ETF AND INDEX

[shortterm]

Madness of financial markets....

Today the spot market gas price in the UK fell to -0.04 pounds (-4 pence or almost -8 cents a therm). Unlike most of Europe, the UK energy companies tend to mostly deal with extremely short term contracts and natural gas market has been very tight (in part because they used to be self sufficient and the North See production is declining fast). A new pipeline opened from Norway and the spot market was flooded with supplies. No one needed it and people had tons for immediate delivery. So they had to pay for the gas grid to store it.

Now, if we just would have an unusually warm winter, so many companies would be hit big time. One of the low cost airlines (can't remember whethet it was easyjet or ryan air) is losing hugely because they hedged their fuel use at the level of 70 dollars untl March.

It's kind of like the gold producers but in reverse. They kept selling forward they production because gold price kept falling. The hedgers lost big time when the market turned. Now those companies that have hedged their fuel use for 3 to 9 months forwards are losing big losses.